The Pakistani Rupee (PKR) posted strong gains against the US Dollar (USD) and appreciated 46 paisas against the greenback in the inter-bank market today. It hit an intra-day high of Rs. 172.85 against the USD during today’s open market session.
The PKR appreciated by 0.27 percent against the USD and closed at Rs. 174.77 today after it posted losses of 56 paisas and closed at Rs. 175.24 in the inter-bank market on Friday, 19 November.
With a fresh surge in valuation, PKR will look to define new resistance levels during the week as pending fiscal reforms finally get the nod. The local currency closed at an all-time low of Rs. 175.73 against the greenback on November 12.
The Rupee has made encouraging leaps today on the back of bullish sentiments from the exchange ledger. Perhaps an even bigger indicator of the PKR resurgence is the successful correspondence between Pakistan and the International Monetary Fund (IMF). Earlier today, representatives of both parties reached a staff-level agreement on policies and reforms needed to complete the sixth review under the $6 billion Extended Fund Facility (EFF).
The agreement is subject to approval by the Executive Board, following the implementation of prior actions, notably on fiscal and institutional reforms, read an official press release.
The former Treasury Head of Chase Manhattan Bank, Asad Rizvi, discussed the Rupee’s interbank showing in a tweet earlier today. He said, “Though 150bp Policy Rate Hike gives #PKR interest rate differential edge. But this may not be enough to calm market sentiment, as [the] hike is not due to [the] booming economy.”
Though 150bp Policy Rate Hike gives #PKR interest rate differential edge.But this may not be enough to calm market sentiment,as hike is not due to booming economy.
Neither 1.6b C/A deficit (OCT) will do any good.
Announcement of DEPOSIT/DEFERRED OIL & IMF will help.
— Asad Rizvi 🇵🇰 (@asadcmka) November 22, 2021
He added, “Neither 1.6b C/A deficit (OCT) will do any good. Announcement of DEPOSIT/DEFERRED OIL & IMF will help”. At inter-bank close, as a precaution, he said, “Quotes in INTER BANK MARKET is very wide which is not a good sign. #SBP should take note & ask banks to quote narrow prices.”
The local currency recovered due to weak dollar demand after news of the IMF agreement hit the news, according to currency brokers. In this regard, the Head of Research at Business Recorder, Ali Khizar, tweeted, “The news of IMF and rate hike over the weekend has taken the air out of the currency speculators”.
The news of IMF and rate hike over the weekend has taken the air out of the currency speculators
PKR/USD trading at 172.75-173
— Ali khizar (@AliKhizar) November 22, 2021
The PKR made an impressive showing against the other major currencies as well and posted gains in the inter-bank currency market today.
It gained 68 paisas against the Canadian Dollar (CAD), 57 paisas against the Australian Dollar (AUD), and 12 paisas against both the UAE Dirham (AED) and the Saudi Riyal (SAR).
The Rupee also broke its losing streak against the Euro (EUR) after it posted gains of Rs. 1.35 against the Euro. It also posted gains of 17 paisas against the Malaysian Ringgit (MYR) and 6 paisas against the Chinese Yuan (CNY).
PKR also managed to post gains of 83 paisas against the Pound Sterling (GBP) in the inter-bank currency market today after surprises last week.